Walmart's shares defy trends as coronavirus rattles Wall Street

Key Points
  • Walmart's share price was up nearly 2% in trading Monday, amid a widespread selloff in the broader market. 
  • The retailer said it's seen a consumer stock-up of goods, such as food and hand sanitizer, amid coronavirus concerns. 
  • Walmart's stock was the least affected during the 2008-2009 recession, according to a Cowen report. 
A worker walks past the Pharmacy in a Walmart store in Chicago.
John Gress/Corbis via Getty Images

As coronavirus concerns rattled Wall Street, Walmart's stock went in the other direction during most of Monday trading. Its share price rose as much as 2%.

Walmart's shares were giving up some of its gains as the market's close approached.

The upward trend may indicate that Wall Street is betting on Walmart to benefit from shoppers' stockpiling and remain steady, even in economic turbulence. The company's stock was least affected during the last recession, according to a Cowen analysis of retail stock.

In midday trading Monday, Walmart was the only positive component of the Dow Jones Industrial AverageVerizon had also been positive earlier in the day.

Walmart is among the retailers that have seen a surge of shopping as customers buy hand sanitizer, cleaning products, canned goods and more. Costco, for example, said in a Thursday earnings call that it was receiving deliveries daily to keep up with demand for water, paper towels, sanitizing wipes and other household items.

Walmart Chief Financial Officer Brett Biggs said at an investor conference in Boston last week that the retailer has seen a difference in shopping patterns. 

"We're seeing, as you would expect, stock-up with customers of certain items, but not tremendous changes in customer behavior," he said. "Just week to week, we'll have see how it transforms, and we'll have to keep people safe and continue to run the business efficiently."

In China, Biggs said, Walmart saw an increase in online grocery shopping.

Some retailers have responded to stockpiling by limiting customer purchases. Over the weekend, Target began limiting purchases of disinfectant wipes, hand sanitizers and hand and face wipes to six per guest. Other retailers are taking similar steps. For example, Kroger is limiting purchases of sanitizers and cold and flu-related products to five per order. Kroger owns grocery chains, including Fred Meyer.

Walmart is one of three retail stocks that Cowen recommended during the pullback. In a report last week, the research firm said that Walmart, Costco and Planet Fitness stock performed well during previous recessions.

It said Walmart, in particular, is "one of the best positioned retailers with strong offensive and defensive characteristics." It said the company "could see a material lift" in grocery and health and wellness because of customer's caution about the coronavirus.

During the height of the 2008 and 2009 recession, Cowen said share prices were down an average of 31% among retailers. Walmart's share price rose 2% during that period.

Walmart is the largest grocer in the U.S. Online grocery sales have been the engine of Walmart's U.S. e-commerce business, as more customers use curbside pickup and delivery. Its e-commerce sales — including items beyond grocery — were up 35% in the fiscal fourth quarter, but the business is still unprofitable.

How coronavirus fears are affecting the retail industry
How coronavirus fears are affecting the retail industry